11/12/15

NEW NISSAN DEALERSHIP PLANNED

Tim Krohn
The Free Press, Mankato, MN

Date: November 12, 2015

MANKATO — The year is closing out with a spate of big business deals in Mankato, including plans for a new Nissan dealership, the sale of two hotels and an investment partner added for an under-construction building downtown.

A group tied to Mankato Motors and owner Dale Schmitt is planning to build a Nissan dealership just east of Snell Motors.

Doug Anderson, a longtime owner of local hotels, recently sold the City Center Hotel in downtown Mankato to a Twin Cities group, which is planning significant remodeling to the property.

In downtown Mankato, Kyle Smith and his Tailwind Group brought in an equity partner as they put the finishing touches on a new tower that will house Ridley and others.

And the GrandStay Residential Suites, next to the former Asiana Grill and near Heintz, has been sold to a Mankato businessman.

Nissan expanding

Mankato Motors carries the Nissan line of vehicles, along with its primary line of Chevrolet and also Volkswagen.

The planned new Nissan dealership, which will sit on 5 acres, will offer substantially more room than the shared space at Mankato Motors.

Initial plans for the site are being reviewed by the city. “Our plan is for construction in 2017,” Schmitt said.

Nissan has just more than an 8 percent share of the U.S. auto market and has set a goal of capturing 10 percent by 2017. In 2014 Nissan set a record with 1.28 million vehicles sold in America.

The land will be on the corner of Haefner Drive and Madison Avenue/County Road 17 and is owned by the Haefner Children LLC.

Decades ago the area was the Haefner farm. Menards was first to build on the land with their building being converted into Snell Motors when Menards built its current store.

City Center Hotel

Doug Anderson built the 150-room Holiday Inn in downtown Mankato in 1979 and in 2009 he took the hotel independent and renamed it City Center Hotel.

His family sold the hotel recently to a group of five Twin Cities investors related to businessman Zahid Hameed of Brooklyn Park. The sale price was $2.65 million.

City Center General Manager Rick Lecy, who came in under Anderson and is now with the new owners, said some of the investors own other hotels and for some this is their first hotel deal.

He said they are already working on renovations to the hotel. “We’re looking at the public spaces first, the meeting rooms, lobby, pool,” Lecy said.

He said they will likely move quickly on some renovations to finish before events such as New Year’s Eve parties come. “You only have a few slow months, and you want to get (the renovations) done then,” said Lecy, who has led renovations at a number of other hotels.

He said the guest rooms were renovated a couple of years ago. “Guest rooms should be (redone) about every five years.”

Lecy said the owners may consider tying the hotel to a franchise in the future but for now will continue to operate it as an independent. Lecy said that while carrying a franchise name can add to average occupancy, the location of the City Center Hotel to the civic center and downtown skyway makes it relatively easy to market as an independent.

Anderson, who was inducted into the Minnesota Lodging Association Hall of Fame in 2009, has been moving out of the hotel business he has so long been involved in.

Anderson, 76, recently sold the Holiday Inn Express, next to the hilltop Hy-Vee, for $4.5 million to an Iowa group.

His last local hotel, the 145-room Best Western, is also listed for sale.
Investor in Ridley building

The Ridley building, on the corner of Cherry Street and Riverfront Drive, is one of a trio of towers that have gone up in the past couple of years on the same block. The Profinium Place tower, on the corner of Riverfront Drive and Warren Street, is already occupied. A building on Front Street, which will have commercial space on the ground floor and high-end apartments on the upper floors, is near completion.

Tailwind, owned by Kyle Smith, his brother Landon and Reggie Reed and Michael Sather, spearheaded all the projects at a cost of around $30 million, plus $10 million in public spending for a parking ramp and other work.

Tailwind recently brought in an equity partner on the Ridley building. Finance & Commerce, a daily print and online business newspaper, reported that Mid Rise Holdings II LLC of Mora brings $12.5 million to the project.

“We still have it and manage it, we just brought in an equity partner,” Smith said. He said it was an opportunity for the ownership group and it will help quickly finish the building, with some tenants set to move in in the coming weeks.

The building will be the new headquarters for Ridley, currently housed on North Riverfront Drive. Northwestern Mutual also will be a tenant. Smith said the building is 100 percent leased. The Profinium tower is 95 percent full.

Smith said 95 percent of the apartments in the Front Street building are leased. He said he’s close to announcing commercial tenants on the ground floor of the building.

GrandStay sold

The 53-room GrandStay Residential Suites has been sold by a group of investors near St. Cloud to a group tied to Mankato businessman Shawn Clow, according to Finance & Commerce. The sale price was $1.6 million.

Clow told the newspaper he planned to create an independent boutique extended-stay hotel.